Billionaire Julian Robertson Loves Alibaba Group Holding Ltd (BABA), Apple Inc. (AAPL), and Netflix, Inc. (NFLX)

Netflix, Inc. (NASDAQ:NFLX) is another major stock investment of Tiger Management as it holds 71,400 shares of the video streaming service, with a market value of $29.75 million. The shares of Netflix, Inc. (NASDAQ:NFLX) have seen tremendous growth in 2015, having grown by over 80% year-to-date. Netflix is offering services in 50 different countries and is planning to expand its network aggressively. Pivotal Research recently upgraded its price target on Netflix to $850, an upside of over 35%, while Apex Capital expects Netflix, Inc. (NASDAQ:NFLX) to be the next $100 billion internet firm (which would suggest substantially more upside, of about 170%). Some of the biggest shareholders of Netflix include Coatue Management and Carl Icahn‘s Icahn Capital.

Hedge funds and other big money managers like Julian Robertson tend to have the largest amounts of their capital invested in large and mega-cap stocks like Netflix, Inc. (NASDAQ:NFLX) and Apple Inc. (NASDAQ:AAPL) because these companies allow for much greater capital allocation. That’s why if we take a look at the most popular stocks among funds, we won’t find any mid- or small-cap stocks there. However, our backtests of hedge funds’ equity portfolios between 1999 and 2012 revealed that the 50 most popular stocks among hedge funds underperformed the market by seven basis points per month. On the other hand, their top small-cap picks performed considerably better, outperforming the market by 95 basis points per month. This was confirmed through backtesting and in forward tests of our small-cap strategy since 2012. The strategy, which involves imitating the 15 most popular small-cap picks among hedge funds has provided gains of more than 139%, beating the broader market by over 80 percentage points (see the details).

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